Background:

Federal Grants and Programs.

In carrying out the purposes of federal grants or programs, counties, cities, towns, and public corporations have various enumerated powers, including to:

enter into agreements with the United States, any federal agency or department, or any state agency or political subdivision to receive or expend federal or private funds for any lawful public purpose;
issue bonds, notes, or other evidence of indebtedness guaranteed or secured by federal funds, and agree to repay and reimburse the guarantor;
provide security for the bonds, notes, or other evidence of indebtedness; and
establish special funds to pay amounts owed on the bonds, notes, or other evidences of indebtedness.

Introduction - Public Corporations, Commissions, and Authorities.

Counties, cities, and towns (local governments) may by ordinance or resolution create public corporations, commissions, or authorities (collectively, public corporations) for the purpose of improving: the administration of authorized federal grants or programs; governmental efficiency or services; or general living conditions in urban areas of the state.

Public corporations created for these purposes may: administer and execute federal grants or programs; receive and administer private funds, goods, or services for any lawful public purpose; and perform any lawful public purpose or public function. In creating public corporations, local governments must limit the liability of the public corporation to that entity's assets and property to prevent recourse to the local government's assets or credit.

Public Corporations, Commissions, and Authorities.

A local government that creates a public corporation must provide for its organization and operation, as well as control and oversee the entity's operation and funds. Public corporations are subject to general laws regulating local governments, multi-member governing bodies, and local governmental officials, such as requirements of the State Auditor, the Public Records Act, the Open Public Meetings Act, the Code of Ethics for Municipal Officers, and local government whistleblower protection laws.

Public corporations may be empowered by the local government to, for example: own and sell real and personal property; contract with individuals, associations, corporations, the State, or the United States; loan or borrow funds; issue bonds and other instruments evidencing indebtedness; or transfer funds, real or personal property, or property interests. However, the public corporation may not exercise eminent domain or levy taxes or special assessments.

A local government that transfers real property to a public corporation must impose appropriate deed restrictions to ensure that the property continues to be used for the public purpose for which it is transferred. Additionally, a local government must require the public corporation to provide advance notice of any proposed sale or encumbrance of the property transferred by the local government. The sale or encumbrance may only occur after approval of the public corporation's governing body at a public meeting.

If a public corporation is insolvent or dissolves, the superior court of the county in which the public corporation operates has jurisdiction to appoint and supervise trustees and receivers of the corporate property and assets. All liability incurred by the public corporation must be satisfied exclusively from the assets and property of the public corporation. Creditors do not have a right of action against the county, city, or town that created the public corporation.

Taxation of Public Corporations.

A public corporation has the same immunity from taxation as that of the local government that created the entity. However, public corporations must pay an excise tax on real and personal property equal to the amount that would be paid if the property were privately owned.

Property exempt from the excise tax includes:

property within a special review district established by ordinance prior to January 1, 1976;
property listed on a federal or state register of historic sites;
property owned, operated, or controlled by the public corporation that is used for specified purposes, such as for low-income housing, a convention center, performing arts center, street, public open space, or public utility corridor; and
blighted property owned, operated, or controlled by the public corporation that is contaminated with hazardous substances and was acquired for remediation and redevelopment purposes.

Proceeds from the excise tax must be allocated by the county treasurer to various taxing authorities in which the property is situated in the same manner as property taxes.

Property Taxes and Leasehold Excise Taxes.

All real and personal property in Washington is subject each year to the state's property tax based on its value, unless a specific exemption is provided by law. The tax is determined by multiplying the assessed value of property by the tax rate for each taxing district in which the property is located.

Property owned by federal, state, or local governments is exempt from the property tax. However, private lessees of government property are subject to the leasehold excise tax, which imposes a tax burden on persons using publicly-owned, tax-exempt property, similar to the property tax that would be paid if the property were privately owned.

Interlocal Cooperation Act.

The Interlocal Cooperation Act (ICA) allows public agencies to enter into agreements with one another for joint or cooperative action. Any power, privilege, or authority held by a public agency may be exercised jointly with one or more other public agencies having the same power, privilege, or authority. A "public agency" for purposes of interlocal agreements includes any agency, political subdivision, or unit of local government. The term specifically includes municipal corporations, special purpose districts, local service districts, state agencies, federal agencies, recognized Indian tribes, and other states' political subdivisions.

Summary of Bill:

Federal Grants and Programs.

For purposes of carrying out federal grants or programs, port districts are granted various powers similar to a county, city, town, or public corporation, including authority to:

enter into agreements with the United States, any federal agency or department, or any state agency or political subdivision to receive or expend federal or private funds for any lawful public purpose;
issue bonds, notes, or other evidence of indebtedness guaranteed or secured by federal funds, and agree to repay and reimburse the guarantor;
provide security for the bonds, notes, or other evidence of indebtedness; and
establish special funds to pay amounts owed on the bonds, notes, or other evidences of indebtedness.

Port District Creation of Public Corporations, Commissions, and Authorities.

Port districts are granted the same powers, rights, and duties as counties, cities, and towns with respect to the creation, organization, and supervision of public corporations, commissions, and authorities. Port districts may create public corporations, and two or more port districts may jointly create a public corporation pursuant to an agreement for joint or cooperative action under the ICA.

Limitation on Port District Powers.

The powers, authorities, or rights granted to any port district or its agents under applicable statute do not have any effect beyond the limits of the incorporated areas of the port district, unless: (1) provided by contract between the city and another city, a county, or a port district, or among one or more port districts; or (2) as provided in an agreement for joint or cooperative action in accordance with the ICA.